Insurance Academy

How Does the Homeowners’ Policy Handle Firearms?

By Patrick Wraight | March 14, 2018

Once again, we find ourselves in the deeply political and emotional debate about guns, the second amendment, gun control, and safety. Last Friday, Florida’s Governor signed into law new gun control regulation designed to make schools safer. This is not the place for my feelings about gun control, or the current debate so I’m not engaging in it. If you want to know my views about topics outside of insurance, that requires taking my wife and I out for dinner. Why? Free dinner. Nuff said.

However, it is important to clear up some misconceptions about guns, insurance, and the place of the insurance industry. We may have to deal with some misinformation from a popular (and growing) insurance company. Rather than referring to guns, handguns, rifles, etc. I will use a term that seems a little less inflammatory. I will refer to firearms.

Question #1: Is the firearm covered for loss or damage?

Let’s start from a property standpoint because when you boil it down, firearms are personal property. When an individual owns a firearm and keeps it in their home with the rest of their property, the homeowners’ policy applies. What’s covered on the HO-3?

Coverage C – Personal Property, 1. Covered Property

We cover personal property owned or used by an “insured” while it is anywhere in the world.

That’s the broad statement of coverage. Now we have to look for exclusions and limitations on this coverage that would apply to a firearm.

  1. Special Limits of Liability

$2,500 for loss by theft of firearms and related equipment.

Now we have a limitation based only on the (otherwise) covered peril insured against, theft. Looking through the rest of the exclusions and limitation on the HO-3, I haven’t found any other exclusions or limitations. Different carriers may have filed different coverage forms and for those, you would have to refer to the carrier to find out what changes they have made to this form. Without diving into the other perils insured against, we find that firearms (and related property) are treated like other personal property on the homeowners’ policy. If they are destroyed in a fire or hurricane, there is no limit on coverage.

Question #2: Is there coverage if someone uses the firearm in a way to injure someone?

This gets a little blurry so let’s get into some policy language and maybe some situations. Like before, we have to find out what coverage might apply related to a firearm. Let’s start with the broad situation where someone was injured or property was damaged by an insured using a firearm.

Coverage E – Personal Liability

If a claim is made or a suit is brought against an “insured” for damages because of “bodily injury” or “property damage” caused by an “occurrence” to which this coverage applies, we will”: pay up to our limit of liability for the damages for which an “insured” is legally liable….and Provide a defense at our expense by counsel of our choice…

Just like any other liability issue, there must be a claim or suit brought against an insured. Broadly, we could say that as long as there is bodily injury or property damage caused by an insured, there is coverage at this point. Before we look for exclusions, we have to discuss the definition of insured. If you’re familiar with the homeowners’ policy, you’re aware that the definition of insured includes any resident relatives, or people under 21 and in the care of a resident relative. It also extends that definition to students enrolled in school full time living at the school until they reach 24. Now that we’ve spoken to that issue, we need to look for applicable exclusions. Of course we find this exclusion.

Expected or Intended Injury

“Bodily injury” or “property damage” which is expected or intended by an “insured” even if the resulting “bodily injury” or “property damage” is of a different kind, quality or degree than initially expected or intended; or is sustained by a different person, entity or property than initially expected or intended.

However, this exclusion does not apply to “bodily injury” or “property damage” resulting from the use of reasonable force by an “insured” to protect persons or property;

So, there is this possible exclusion that we have to deal with, but to do that, we have to set aside the insurance language and put some street clothes on this scene. Consider what appears to be the expected situation that liability may be assessed when it comes to firearms. A person legally buys a firearm and is using it in a legal manner, whether in practice, for sport, or home or personal defense. The homeowners’ policy expects this exposure and provides for it. The owner of the firearm is lawfully hunting in an area where people normally legally hunt and when he attempts to shoot the animal he is after, he accidentally injures someone. This policy anticipates that this might happen and provides coverage.

The problem arises when people obtain firearms contrary to their local laws or intend to use them unlawfully. This policy cannot anticipate that exposure and therefore cannot possibly be asked to provide that coverage. As Dr. McCoy once said, “How can you get a permit to do a(n)… illegal thing?”

I have a couple of other questions that I want to address, but that will have to wait until next week. What questions? I’ll give you my thoughts on what we, as insurance people, should be doing related to this subject. I’ll also clear the mist around a particular insurance company’s press on the subject.

About Patrick Wraight

Patrick Wraight, CIC, CRM, AU, is director of Insurance Journal's Academy of Insurance. He can be reached at pwraight@ijacademy.com.

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